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Where’s Our Ferries?

Where’s Our Ferries?

Fears for Ferguson Marine

            The board of directors of Ferguson Marine has raised doubts over its ability to continue as a going concern due to doubts over future funding, and the delivery of the two ferries being built at Port Glasgow continues to be reviewed.  The Scottish government has still not signed off on £60m extra funding which was approved in the recent budget.

            The annual accounts for 2021/22 have just been laid before the Scottish parliament, but the current budget allocation for 2021/22 did not cover the full costs anticipated for January, with additional costs relating to the ferries being built.

            Alarmingly, the profits for the Scottish government-owned firm fell from £82.4 million in 2020/21 to £130,000 in 2021/22.  Scottish government funding is paid to the firm monthly in arrears for the two ferries. Despite all this, the board claims the future will be bright once the two ferries are eventually delivered, but are awaiting clarity on future Scottish government funding.

Audit Scotland

            The public finance watchdog has previously spoken of risks and uncertainties over the financial future of Ferguson Marine, which has been sanctioned twice already.  It has only just delivered accounts which were due on December 31st.

Performance Bonuses

           Audit Scotland has also raised concerns about £87,000 in performance bonus payments being paid to senior Ferguson Marine managers in 2021/22, despite it being unclear how their performance was judged as no Key Performance Indicators (KPIs) are in place, nor is any other robust appraisal system.  Payment of 7.5% bonuses on delivery of certain milestones and another, discretionary, 10% was paid on completion of the hull on vessel 801, apparently sanctioned by Tim Hair, the former turnaround director.

            Audit Scotland also said the Scottish government was not even aware of bonus payments and they were not approved by the department, although the pay deal had been signed off by the Scottish government.

            There are further bonus payments due next month for senior managers including Chief Executive David Tydeman, who is eligible for a performance-related bonus of up to 40% of his pay (£82,000 on top of his £205,000 salary).

National Insurance

            CalMac were exempted from paying £11 million National Insurance contributions in the last two years while simultaneously receiving

            £36 million public funding including money from HMRC in Covid support.  The non-payment arose from their use of a staffing ‘tax vehicle’ used by many UK firms.  It is perfectly legal, but over 17 years has saved £50 million+ to firms not having to pay National Insurance payments to the government for employees who may think their record is up to date and would find a nasty shock should they need to claim benefits.

           It also keeps much-needed funds out of the tax system, a practice which Nicola Sturgeon once described as ‘despicable’ and ‘obscene’, but which is certainly ironic in this case, as CalMac is wholly owned by the Scottish government.

            CalMac has been fined more than twice as much in performance failure fines in the last year as in the previous nine, the total now standing at £2.31 million.  

Weight Limits

            A weight limit of 35 tonnes will be in place from March 20th on the Maid of Glencoul Corran Ferry service in Lochaber, with vehicles over that weight unable to use the service which connects Fort William, Ardgour, Sunart, Ardnamurchan, Moidart, Morar, Morvern and Mull.  The only exceptions will be emergency services and service buses.  This temporary service is running while the MV Corran awaits parts for repairs.

            Some businesses fear they will be finished as they may only be able to get supplies via a long and costly road trip.  One such is the Ardnamurchan Lighthouse Trust coffee shop.

            Lochboisdale port was previously closed suddenly for two weeks amid safety concerns, with all the attendant disruption, and Mull and Arran ferry action groups have despaired over the state of their ferry connections, with residents, islanders and tourists alike adversely affected. 


            Adding to the problems, Loganair will be suspending services from Inverness to Stornoway and Benbecula for 6 weeks due to a pay dispute, which is disrupting patient appointments and the visiting consultant service from the mainland. 

Turkish Ferries

            Meanwhile the first of two ferries being built for Scotland at the Cemre yard in Turkiye is taking shape apace, with work on the second ferry starting three weeks ahead of schedule. The ones at Port Glasgow are not faring so well, with one having recently had a propeller replaced as it had rusted due to sitting idle in the River Clyde for so long.  They are possibly as much as four times the original planned cost over budget and five years late.  This figure includes the write-off of a £45 million loan.

Who is to blame?

          Various factors have been identified:

  • It is alleged the long delays at Port Glasgow may be due to staff refusing to work overtime at the weekend, leading to the employment of more expensive outside staff, raising the overall costs;
  • Long delays have meant parts have rusted and are difficult to replace;
  • One farcical problem was the unfurling of cabling late on in the process, only to find then it was all too short and will have to be re-sourced and re-fitted;
  • Some say the plans are too grandiose for what is needed, and that staff will have better accommodation than passengers; the plans seem to envisage a floating hotel more than a ferry;
  • The Glen Sannox will not initially be running as a dual fuel ferry, as it has not yet managed to source the parts it needs for the Liquefied Natural Gas (LNG) system;
  • The refusal to countenance other suppliers or types of vessel has meant alternatives are not really being considered;
  • Rising energy and supply chain costs are making the project more unaffordable;
  • ‘Limited availability’ of skilled staff in Scotland, and having to compete for them with the private sector;
  • Doubts and uncertainty over further financing from the Scottish government add to the stalemate.


           Whether it is one reason or a number, the real victims are the islanders who are looking at endless delays in completing new ferries, and endless disruption to lifeline businesses, as well as tourism being badly disrupted.  The knock-on effects include missed hospital appointments and treatment, businesses not getting supplies and tourists anxious they may not be able to return easily to the mainland. But conversely, as tourism and tourist-related businesses are mainstays of the island economies, some islanders fear that tourists may be prioritised over them for sailings.

            It is clear the Scottish government needs to force action fast to resolve the situation and it is not clear why Jenny Gilruth did not even meet with the Clyde Catamaran Group, who claim they can deliver 50 catamarans over 20 years for £800 million. There are certainly enough vessels currently in service which are near their ‘use by’ date to warrant urgent action.  It is possible that ferry owner CalMac and operator CMAL will merge to form one publicly owned company, although the Transport Minister did not confirm this, saying only that there would be sweeping changes.

            There is also clearly a question as to why performance-related bonuses were paid for non-performance and without clear parameters for payments being in place, and questions still remain over Ferguson Marine’s ability to deliver not only the ferries under construction but to win and fulfil future contracts when the present saga finally ends.



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